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Edited by Patricia M. Danzon and Sean Nicholson

Abstract

The biopharmaceutical industry has been a major driver of technological change in health care, producing unprecedented benefits for patients, cost challenges for payers, and profits for shareholders. As consumers and companies benefit from access to new drugs, policymakers around the globe seek mechanisms to control prices and expenditures commensurate with value. More recently the 1990s productivity boom of new products has turned into a productivity bust, with fewer and more modest innovations, and flat or declining revenues for innovative firms as generics replace their former blockbuster products. This volume examines the economics of the biopharmaceutical industry, with eighteen articles by leading academic health economists. Part one examines the economics of biopharmaceutical innovation including determinants of the costs and returns to new drug development; how capital markets finance R&D and how costs of financing the biopharmaceutical industry compare to financing costs for other industries; the effects of safety and efficacy regulation by the Food and Drug Administration (FDA) and of price and reimbursement regulation on incentives for innovation; and the role of patents and regulatory exclusivities. Part two examines the market for biopharmaceuticals with articles on prices and reimbursement in the US, the EU, and other industrialized countries, and in developing countries. It looks at the optimal design of insurance for drugs and the effects of cost sharing on spending and on health outcomes; how to measure the value of pharmaceuticals using pharmacoeconomics, including theory, practical challenges, and policy issues; how to measure pharmaceutical price growth over time and recent evidence; empirical evidence on the value of pharmaceuticals in terms of health outcomes; promotion of pharmaceuticals to physicians and consumers; the economics of vaccines; and a review of the evidence on effects of mergers, acquisitions, and alliances.

Bibliographic Information

Publisher:

Oxford University Press

Print Publication Date:

Apr 2012

ISBN:

9780199742998

Published online:

Sep 2012

DOI:

10.1093/oxfordhb/9780199742998.001.0001

Editors

Patricia M. Danzon,editor
Patricia M. Danzon, Ph.D., is Professor of Health Care Management at The Wharton School, University of Pennsylvania. She received a B.A. from Oxford and a Ph.D. in Economics from the University of Chicago. She has held faculty positions at Duke and the University of Chicago. Professor Danzon is a member of the Institute of Medicine and the National Academy of Social Insurance. She has published widely in scholarly journals on a broad range of subjects related to pharmaceuticals and health economics and consults widely for public and private organizations.

Sean Nicholson,editor
Sean Nicholson is Professor in the Department of Policy Analysis and Management at Cornell University, where he is currently conducting research on the value of new medical technologies; the benefits of physician specialization; the effect of financial incentives on physicians' treatment decisions; and the causes of autism. He is currently a research associate at the National Bureau of Economic Research and the research director of the Upstate Health Research Network. Prior to joining Cornell in 2004, Nicholson was a faculty member in the Health Care Systems Department at the Wharton School of the University of Pennsylvania. He worked for four years as a management consultant with APM and taught high school for two years before enrolling in graduate school. He received a BA from Dartmouth College in 1986 and a PhD in economics from the University of Wisconsin-Madison in 1997.

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